The Effect of World Oil and Gold Prices on Indonesia Composite Stock Price Index Mediated by Exchange Rates

The relationship among world oil, gold and stock prices is still needed to be explored, because gold and oil are the most active commodities traded in global market. The price changes of both will be reacted by the capital market so that these factors have potential to influence stock prices. This study used a quantitative approach with a sample of weekly data on the Indonesia Composite Stock Price Index (IDX Composite), Brent World Oil Prices, LBMA World Gold Prices, and the Exchange Rate of Rupiah against the US Dollars from June 2017 to May 2022. The sample used is 260 data observation. The results showed that world oil prices directly affect IDX Composite, while world gold prices only affect through exchange rates. This study supports the theory of investment decision making regarding to the direct and indirect effects that lead to the IDX Composite. These findings can provide guidance to the company to carry out various corporate actions for changes in world oil and gold prices and exchange rates so that stock prices can be stable. Also, providing practical guidelines to investors in investing in the capital market, so that they always pay attention to the movement of the IDX Composite